Wage and Hour Case Notes

• Jurisdiction: California,United States
• Author: By Leonard H. Sansanowicz
• Publication year: 2017
• Citation: Vol. 31 No. 6

Wage and Hour Case Notes

By Leonard H. Sansanowicz

Leonard H. Sansanowicz is Senior Counsel at Feldman Browne Olivares, APC and represents employees in all aspects of employment law. He has been a Southern California Rising Star each year since 2013, and in 2015, 2016, and 2017 was named to the Up-and-Coming 100 list. He can be contacted at: leonard@leefeldmanlaw.com.

Claims for Unpaid Wages Are Arbitrable Under Iskanian Rule, Because Such Claims Are Not for Civil Penalties Under PAGA

Esparza v. KS Indus., L.P., 13 Cal. App. 5th 1228 (2017)

The Labor Code Private Attorneys General Act of 2004 (PAGA)¹ allows aggrieved employees to recover civil penalties on a representative basis. Under the rule adopted in Iskanian v. CLS Transp. Los Angeles, LLC,² (Iskanian), such representative actions are qui tam in nature and, because a plaintiff brings the action as the proxy or agent of the state's agencies tasked with enforcing state labor laws, may not be compelled to arbitration. Defendant here successfully argued that claims for unpaid wages under Labor Code §§ 558 and 1197.1 are inherently individual in nature and therefore do not seek "civil penalties" subject to the Iskanian rule, but rather are preempted by the Federal Arbitration Act (FAA)³ The court of appeal disagreed that Thurman v. Bayshore Transit Mgmt., Inc.,⁴ should control. In Thurman, the court opined that "In our view, the language of section 558, subdivision (a), is more reasonably construed as providing a civil penalty that consists of both the $50 or $100 penalty amount and any underpaid wages, with the underpaid wages going entirely to the affected employee or employees as an express exception to the general rule that civil penalties recovered in a PAGA action are distributed 75 percent to the Labor and Workforce Development Agency . . . and 25 percent to the aggrieved employee."⁵ Instead, the Esparza court held that the statutory language of the Labor Code sections in question ("Wages . . . recovered pursuant to this section shall be paid to the affected employee") reflected a private dispute between the employee and the company, since the plaintiff could have pursued those damages on his own, thus bringing those claims within the scope of the FAA, despite any potential overlap of private and public claims.

Employer Waived Its Right to Compel Arbitration by Filing, Withdrawing, and Then Refiling a Motion to Compel Years Later

Sprunk v. Prisma, LLC, 14 Cal. App. 5th 785 (2017)

Plaintiff, an exotic dancer, brought a wage and hour class action claiming that she and other dancers were misclassified as...